First let me preface this by saying that I believe you're well-intentioned and not a "bad parent"
Trust me man, we understand cause and effect from a very early age, naturally. The tinkering we do that pisses our parents off (like my daughter spilling a glass of water all the time) is experiencing and understanding cause and effect.
The best way to teach good work ethic is by example. Trying to force children into uncomfortable scenarios against their will may work in the short term, but actually encourages procrastination and under-productivity later in life when situations really matter. Every time they need to actually do something, a deeply rooted voice they're not even aware of says, "No, no, no", because that's what they experienced through much of childhood from their parents and their teachers every time they were told to do something against their will.
Public education is bullshit, it really is and it's unfortunate your children have to undergo that system as I did. Being told you have to learn this and that against your will is bullshit, and it's not so much about education as it is about creating obedient citizens.
But if you want your kids to do well in school, instead of threatening them by taking away personal possessions, tell them "You can perform however you want. Just understand that if you fail or flunk out, it'll severely impact your ability to get a good job later in life. It's your decision, it's your life." Teenagers aren't stupid, they get it. They rebel because they don't like being controlled, not because they're inherently irresponsible. So while parents are well-intentioned by trying to force their children to do certain things, the results are often opposite of the intended goals.
Edit: And with those last few words in mind, that's oddly similar to government policy.